Using Collateral Underwriter to Turn Appraisers In

[Joe Flacco]

The definitions are just no good. I kind of default to construction cost ranges for the ratings.

I think everybody has a image of what is a solid Q4, Q3, Q2, Q1, and then most properties tend to fall in between ratings. Like borderline ratings. But then everbodys image of what is a solid Q rating depends on the range of homes they see in their market.

 

[alebrewer]

Gotta love those churn and burn AMC appraisers using thost automatic form fillers.

It's not just AMC appraisers...

 

[NC Appraising]

I would say that house is a Q3. Definitely not a Q2.

Excellent example of why appraisers, and not "others" should be inspecting the properties.

No pointing at you, but photos can be misleading.

FWIW, there were a total of 10 other appraisers that used this comp in their report. 9 rated it as a Q2 home and one had it at a Q4 home. None rated it as a Q3.

 

[CGinMN]

FWIW, there were a total of 10 other appraisers that used this comp in their report. 9 rated it as a Q2 home and one had it at a Q4 home. None rated it as a Q3.

Excellent example of confirmation bias, and why the GSEs don't want to give us the keys to CU.

Arguing the borderlines of UAD quality ratings is an exercise in futility IMO.

 

[George Hatch]

The generic terms appraisers were previously using for quality and condition amounted to 6 categories.

Poor
Fair
Average
Good
Very Good
Excellent


The GSEs show 6 quality levels, so that's sufficient; but their descriptions are minimal and they aren't showing pics that demonstrate what they're talking about. I reckon 1 page of description (materials, wall heights, foundation and framing norms, baths per bedrooms, etc) + 6 pics per quality level would be a lot more helpful to appraisers than what they're using now.

The California Board of Equalization (related to tax assessments) has their own cost manuals, which they update every year. For Class C construction they show 5 quality levels (C-4 to C8), and the 9 costs because they include costs at the halfway point (like C5.5 and C7.5). For Class D construction they show descriptions and pics for 6 quality levels (D5-D-10) and include costs at the halfway point. I'm in California, so FOR ME, the ability to reference these halfway points in my quality and conditions descriptions comes in handy, but that isn't a solution that will work with the UAD ratings in the grids, although you might be able to do that in your written summary.

 

[CGinMN]

The GSEs show 6 quality levels, so that's sufficient; but their descriptions are minimal and they aren't showing pics that demonstrate what they're talking about. I reckon 1 page of description (materials, wall heights, foundation and framing norms, baths per bedrooms, etc) + 6 pics per quality level would be a lot more helpful to appraisers than what they're using now.

The GSEs like to keep it vague so they can shift the risk onto other parties.

 

[RCA]

So the moral of the story is that Fannie, TAF, state-boards, etc., are driving appraisers into suicide and divorce. And are on the warpath to improve their crappy AVM. Sad but true

First off, the CU system itself didn't submit the complaint. Someone at Fannie submitted it and that someone doesn't have to be an appraiser. Moreover, I'm not aware of any state that requires the submission of a complaint by another licensee to include SR3 review report be attached.

Secondly, as I understand it, D-F requires lenders to submit complaints to the states if/when they run into such problems. No loss or damages necessary.

Thirdly, I've lost count of how many appraisers have complained about Fannie's long history of accepting trash and not cutting these appraisers off, and how that has undermined the business interests of the appraisers who are doing what they're supposed to be doing.

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She mentioned that there was a dispute about her condition and quality ratings of the subject. That alone will affect comp selection and reconciliation. If that's the disagreement then that's where her rebuttal should have focused, not on whether her comp selection fit in with her quality ratings. She also mentioned previously being instructed on certain aspects of her assignments - specifically mentioning 2-4s, that she apparently didn't understand before and then setting out to learn more about what she's supposed to be doing as a result of this process. She walked away from this one without any discipline but has modified her work so as to avoid some of these problems in the future.

Hooray, the system works as intended. She has learned from her experience that she needed to tighten up in certain areas. Hopefully her trainees will share some of those improvements in her competency.

Then she runs on about hybrids and desktops not being compliant (factually incorrect) and being indefensible (also incorrect) and our buddy Phil just throws gas on the paranoia.
-----------------------

There is no amount of organizing that is going to persuade Fannie to go more lightly on the work they are accepting (which personally, I approve of them tightening up). What's far more likely is that word will spread that Fannie is getting more selective about what they will/won't accept and the appraisers will respond by meeting those additional expectations. Fannie is basically *demonstrating* their expectations, which is exactly what everyone should want.

Well, I have to agree, IF the complaints are justified. Without seeing the reports, I can't have an opinion; except that if you know my opinions in general, then you know in general I regard most residential appraisals as being at least questionable. On the other hand, most people in the industry would probably regard my appraisals as questionable because they are "a bit" too complicated. Well I do provide graphs of the R/earth (MARS) model for each variable - so anyone can see how much the important price factors contribute to value - and from that get the adjustments. So, in that sense, I provide the kind of justification that is fairly detailed and accurate - more than other appraisers. On the other hand again, because of collinearity between things like lot size and GLA or between GLA and room counts, you see negative adjustments for things like lot size or room count, that many will scratch their head on - even though somewhere deep in the report I explain the why and wherefore. So, I keep wondering that no one in all these years has complained about my MARS models. - I guess those graphs are what saves me. And if I provide the reams of paper showing the calculations that goes into the URAR adjustments, - well even the most critical seem to be happy with that.

And then maybe after they read appraisals like mine (I venture to assume some other appraisers are doing some of this), they go to read a standard appraisal report, and don't see any beef to it. In fact, they may be more likely to see errors. In fact, the errors may be so obvious they don't go to the trouble of wasting their time doing a review.

But who knows? FNMA is definitely not perfect. That is for sure.

 

[RCA]

The generic terms appraisers were previously using for quality and condition amounted to 6 categories.

Poor
Fair
Average
Good
Very Good
Excellent


The GSEs show 6 quality levels, so that's sufficient; but their descriptions are minimal and they aren't showing pics that demonstrate what they're talking about. I reckon 1 page of description (materials, wall heights, foundation and framing norms, baths per bedrooms, etc) + 6 pics per quality level would be a lot more helpful to appraisers than what they're using now.

The California Board of Equalization (related to tax assessments) has their own cost manuals, which they update every year. For Class C construction they show 5 quality levels (C-4 to C8), and the 9 costs because they include costs at the halfway point (like C5.5 and C7.5). For Class D construction they show descriptions and pics for 6 quality levels (D5-D-10) and include costs at the halfway point. I'm in California, so FOR ME, the ability to reference these halfway points in my quality and conditions descriptions comes in handy, but that isn't a solution that will work with the UAD ratings in the grids, although you might be able to do that in your written summary.

My quality levels are 0.0-10.0, 100 levels based on percentage in the neighborhood better or worse. If you look at an appraisers reports, then you should see a flat distribution in his quality levels between 0.0-10.0. If you don't then you know something is wrong. .... Well, except homes below 0.8 don't often wind up being appraised - because they are in such terrible shape.

 

[SmilingDog]

Sad

 

[RCA]

The GSEs like to keep it vague so they can shift the risk onto other parties.

Many of the appraisal regulations are centered not at all on what appraisers actually need to do their job - but what the lenders prefer to make their jobs easier - and the business of lending more profitable.

The appraisers at the top are often nothing more than elementary school teachers who probably failed at that or were in someway unsuitable for the job - and became appraisers moving swiftly up the ranks by kowtowing to the lenders, often the vehicle being AI designations.

It’s interesting to read the linked-in and other website recommendations on these individuals - where you will often find very clear hints as to their leftist liberal leanings. - although I would bet they are simply selling their soul to the devil to become successful.

But in any case research the Board of Directors for TAF, and you will find most in this category or working in positions based on currying the favor of banks and lenders - all intertwined with the DC political establishment, I.e. the swamp.

And so what to do? Build a new organization … but with a broader basis not dependent on lending at all. Maybe, maybe simply break away from this traditional concept of appraiser to something more fundamental like Asset and Property Analyst - Valuation Engineer.